Business & Tech

Linde upbeat for 2018 as mega merger nears finish line

German industrial gases firm Linde on Wednesday expressed confidence of hitting the higher end of its 2018 targets as it finalises a mega merger with US peer Praxair that will create a new giant in the sector.

Linde and Praxair won approval from US regulators for their $80 billion merger in October
Linde and Praxair won approval from US regulators for their $80 billion merger in October (AFP)

German industrial gases firm Linde on Wednesday expressed confidence of hitting the higher end of its 2018 targets as it finalises a mega merger with US peer Praxair that will create a new giant in the sector.

Munich-based Linde reported revenues of 13.1 billion ($14.9 billion) between January and September, down 1.7 percent on the first nine months of 2017, which it blamed on negative currency effects and accounting changes.

Adjusted for those effects, revenues were nearly five percent higher year-on-year.

The group's operating, or underlying, profit climbed four percent to 3.30 billion euros, or nine percent when adjusted for exchange rate effects.

Linde put the positive nine-month performance down to "portfolio optimisation and good macroeconomic conditions".

Looking ahead, the group said it expects revenue and earnings "to be at the top end" of projected ranges.

Linde expects 2018 revenues to reach the same level as last year's or to increase by up to four percent.

Adjusted operating profit is forecast to lie between 2017's figure and five percent higher.

The upbeat assessment comes after Linde and Praxair last month won approval from US regulators for their $80 billion merger, overcoming the final hurdle to the tie-up.

The deal will create the world's largest industrial gases firm with annual revenues of around $27 billion, overtaking France's Air Liquide.

The hard-fought merger has forced both sides to sell off more divisions than they initially planned in order to satisfy concerns from competition authorities around the world.

In the US alone, the Federal Trade Commission insisted the merger could only go ahead if the firms shed nine American business units.

Linde will sell activities including its bulk liquid oxygen, nitrogen, and argon business, carbon dioxide facilities and a liquid hydrogen plant to Germany's Messer Group.

New Jersey-based Matheson Tri-Gas will buy five hydrogen-carbon monoxide facilities and a hydrogen pipeline.

The European Commission also demanded concessions, requiring Praxair to offload European businesses.

The last sell-offs will be completed by January 29, Linde has said.